Financial Scandal Ruins Madonna's Malawi School

Audit reveals managers squandered $3.8M of funds

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Madonna has adopted two children from Malawi -- Mercy James and David Banda -- although she faced legal disputes within the country during both adoptions. In the end, both adoptions were finalized by the Malawian government.

Madonna's project to build a girls' school in Malawi was tossed because its managers squandered millions of dollars.

An audit revealed that $3.8 million was spent before construction for the $15 million academy even began, The New York Times reported. Two key players - executive director Phillipe van den Bossche and school leader Anjimile Oponyo -- were sacked, and Madonna and her manager are taking control.

The pop icon told The New York Times she was pleased with other work Raising Malawi has done but is working on fixing the financial disaster. "While I'm proud of these accomplishments, I'm frustrated that our education work has not moved forward in a faster way," she said.

These millions of funds -- donated by the Kabbalah Center and celebs like Tom Cruise and Gwyneth Paltrow -- were apparently lost in design fees, staff salaries, cars, and free housing and a golf course membership for Oponyo.

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It was a telling sign that trouble was ahead when the project's executive director, van den Bossche -- also the partner of Madonna's former trainer -- quit in October after mounting criticism over his handling of funds.

When things were clearly getting out of hand, Madonna turned to the Global Philanthropy Group for help and oversight.

"Philippe's level of mismanagement and lack of oversight was extreme in both aspects of the project and the lack of success of the players on the ground is in large part a result of his inability to effectively manage project plans, people and finances," the Global Philanthropy Group told The New York Times.

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Madonna, who has adopted two children from the African country, said she's trying to pick the pieces back up.

"There's a real education crisis in Malawi," Madonna said in a statement to The New York Times. "Sixty-seven percent of girls don't go to secondary school, and this is simply unacceptable. Our team is going to work hard to address this in every way we can."